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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (61314)	10/30/2001 10:14:58 PM
From: AK2004	Read Replies (1) \| Respond to of 275872

Bill re: One cannot lose a little bit on every CPU and make it up on volume. the idea is that if intel would realize that amd can withstand the pressure and is willing to do it too the only logical conclusion for intel would be to stop the price war. After that both companies would optimize their business for maximum profitability rather than market share. Both companies earnings would improve then. If war would continue then both of the companies would be in real financial problem in a year or two Regards -Albert

To: Bill Jackson who wrote (61314)	10/31/2001 5:27:30 PM
From: TimF	Read Replies (1) \| Respond to of 275872

One cannot lose a little bit on every CPU and make it up on volume. AMD is not doing that. They are selling the chips above the marginal cost of production. The overhead makes for a loss. Increased unit sales with static ASPs would make them profitable so they could make up for it in volume as long as 1 - They could produce more chips (and they will gain the ability to do this as Dresden ramps) and 2 - They could sell more without even lower ASPs (this is the important question, the answer depends a lot on how well the economy and the PC market in particular do). Tim